India to liberalise foreign investment norms

By siliconindia staff writer   |   Tuesday, 25 May 2004, 07:00 Hrs
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NEW DELHI: India will further liberalise its foreign investment policy, especially in areas that can generate employment and boost exports, Commerce and Industry Minister Kamal Nath said Monday.

"We will formulate a new foreign direct investment (FDI) policy that is investment and employment-oriented," Kamal Nath told reporters after taking charge of the ministry.

"We would also like to ensure increased industrial investment, both domestic and foreign," said the minister, who won a Lok Sabha seat for the seventh time from Chhindwara in Madhya Pradesh.

Kamal Nath also said that his ministry would revive the now-defunct board of trade in a bid to increase India's share in global commerce to one percent by 2007.

India's share in global merchandise trade currently stands at a mere 0.8 percent.

He said the board, which will be an enabling body for boosting exports, would have the representation of India's top 25 exporters from different parts of the country and across a wide spectrum of industrial sectors.

An alumnus of the St. Xavier's College in Kolkata, where he graduated in commerce, Kamal Nath said that he hoped to announce India's export-import policy for the current fiscal by the first week of July.

The policy that is generally presented in March was deferred due to the national elections that ended May 10.

He said that the new policy would lay emphasis on farm-based exports, as also on services. "Highest priority will be in increasing the country's exports with special focus on assisting farmers in agriculture exports," he said.

"Exports will be driven by farmers' interests of a better price," he said, emphasising: "By farmers I mean the farmers and not the traders."

Kamal Nath said the Congress-led United Progressive Alliance would strive towards double-digit export growth on a sustainable basis. "For this, transaction costs have to be minimised and procedures at all levels simplified," he said.

He assured that in the new export-import policy more such steps would be announced to ensure a 12-percent export growth this year.

On the issue of the fluctuation in the value of the Indian rupee against the dollar, the minister said the present situation did not warrant any government intervention.

"Exporters should think about some risk management. But I would also request the finance minister to intervene whenever required."

Even though the Indian rupee has depreciated over the past week, the currency has firmed up against the US greenback this year, and exporters had been demanding corrective action by the government.

Kamal Nath, who handled the environment and forests portfolio in the P.V. Narasimha Rao government, said he would also study if the new bill on special economic zones needed to be fine-tuned.

"I intend to hold greater and more intensive consultations with the exporting community all across the country."

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